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It’s clear to me that if we hope to avert catastrophic climate change we need to start viewing our buildings as clean energy power plants. As I’ll show you below, it’ll be easier than you think. Global experts emphasize three things: we face a climate crisis emergency; we have the means to solve the crisis; and our future depends on determined local climate action, now.

With reversals in the U.S. climate policy underway and the Paris climate agreement in question, it’s easy to lose sight of the fact that the clean energy transition is already underway.

Because clean energy is technology, not fuel, innovation drives costs down. More demand for clean energy means more deployment of clean energy, which leads to more experience and learning — further driving costs down. This is fundamentally different from fossil fuel extraction. Each ton of coal is harder to reach than the last and drives costs up.

The clean energy sector has stunned energy analysts, with faster-than-predicted uptake and cost declines. The equalized cost of solar energy decreased by a staggering 85% over the last seven years (Lazard). Wind energy costs went down by 66% percent over the same period. Lithium ion batteries dropped by 80% percent over the past six years (McKinsey & Company).

The boom in renewable energy is reaching an inflection point. Non-fossil energy made up 51% of net new supply of energy in 2015 globally. Some analysts expect 100% of net new supply energy to be non-fossil fuel by 2020. “Peak fossil fuels” may be right around the corner. That’s good news for the planet. But without a revolution in the energy consumption of our buildings, it is not enough. The building sector is the biggest single contributor to greenhouse gas emissions in the U.S. today. That’s a problem. But buildings can become part of the solution as a source of energy, and I’m not just talking about rooftop solar panels.

Carbon neutral buildings became a resource

The “negawatts” we can “generate” through ultra-energy efficiency in buildings is an under-tapped energy resource. Those negawatts are especially valuable to the grid because their “production” naturally peaks during times of high demand, displacing carbon-intensive coal or gas “peaker plants.”

Buildings can be a form of climate action, especially on a large, production build scale. When we make our built environment more energy-efficient, we destroy demand for fossil fuels, and prices goes down. This makes the more difficult-to-extract fossil fuels too expensive to dig up for the low market price, stranding them in the ground. The more energy-efficient our buildings, the more fossil fuels are left stranded in the ground. Combine this with a transition to renewable energy, storage, and demand response, and you’ve got the recipe for meaningful climate action.

If our purpose in sustainable design is to help save the planet, then we need to focus on meaningful carbon-reducing building solutions that are scalable. We do that by making our buildings so high-performing and cost-effective that the approach becomes the no-brainer choice for building owners, developers, and project teams. Passive House makes this possible.

The genius of Passive House design is that it recognizes the building itself — its skeletons and skin — as a technology. Passive House innovation therefore involves both performance and cost, Ã la other clean energy technologies. Powered by modern building science, energy modeling, and an advanced analysis of the thermal properties of building structures, Passive House architecture sits squarely in the realm of information technology and science-based innovation. That is a potential game changer for buildings’ role in the clean energy transition.

Cost-neutral passive house design emerges

Many Passive House projects today are approaching cost parity with conventional construction. When a significantly better product becomes available for little or no extra expense, then mass adoption becomes possible. When Passive House buildings become commonplace — as they are in Europe and as is beginning to happen in Vancouver, B.C. — then the negawatts generated by this stock of ultra-efficient buildings can truly help power the grid. Future electric vehicles can be powered by the negawatts, enabling Passive House architecture to reduce emissions from both the building and the transportation sector.

Recent research by the Grantham Institute at Imperial College of London suggests that the market impact of the declining price of solar energy and electric vehicles could significantly curtail demand for fossil fuels and limit warming to between 2.4°C and 2.7°C, when combined with reasonably strong climate policy. To hit the 2°C target, the research team says that decarbonization of buildings will be vital.

The need for bold climate solutions is urgent, especially given federal intransigence. The good news is that we as designers, builders, and building owners have the means to act on the local level, building by building. Now is the time — our collective future may well depend on it.

28 Comments

Speaking of Lazard's levelized cost of energy...
"The equalized cost of solar energy decreased by a staggering 85% over the last seven years (Lazard). Wind energy costs went down by 66% percent over the same period. "

Note that utility scale solar and on shore wind are now competitive against the cheapest US fossil fuel plants (combined cycle natural gas), and the costs of wind & solar are continuing to decline.

"The genius of Passive House design is that it recognizes the building itself — its skeletons and skin — as a technology. Passive House innovation therefore involves both performance and cost, à la other clean energy technologies."

While it's arguable that PassiveHouse is a technology, whether there is a "learning curve" of cost reductions in any way comparable to that of manufactured mass produced energy technology isn't well demonstrated. Houses are in many ways more like infrastructure than technology, and the sub component technologies of house are very mature & competitive. Buying 2x-3x the insulation of a code-min house doesn't reduce the insulation price/performance by very much, and the price/performance of PassiveHouse windows is fairly high for colder climates.

The cost per lifecycle MMBTU for PassiveHouse may not be financially rational now, but as wind & solar continue decline in cost (at a double-digit percentage per doubling learning curve) it's not clear how long the concept will have relevance.

Dana is right
For experienced builders to take the economic analysis of Passive House construction seriously, they need to stop selling the myth that somehow by being smarter than everybody else their buildings turn out to cost the same to build as code minimum ones.

Large developers work on very tight margins and have to be very efficient in their costs. There is no magic in Passive House that allows a builder who has to use more materials and specialized labour to somehow end up spending the same amount.

There are a whole host of real benefits to the Passive House program. I wish they would push these, rather than the spurious economic claims - or for that matter that adopting Passive House has any chance of "saving the planet".

Metrics distort
Anyone reading the Lazard report should note that the costs they publish don't include everything that one might expect. For example, "reliability or intermittency-related considerations" (a significant issue with large amounts of solar and wind).

With respect to reducing climate change, I recommend considering all of the possible options (not just one's residence) and choosing based on $/ton of carbon. Don't over optimize one thing when there is lower hanging fruit elsewhere.

What's the $/ton of carbon for PassiveHouse windows? Would the money be better spent on an electric car? Or PV panels? Or a thermal storage system (which would be ~zero if one incorrectly used MMBTU or kWh)?

The particulars for narrowing down on the $/ton vary with both time & site specifics, which seems to get short shrift in most PassiveHouse prescriptives and carbon accounting.

Malcolm: Now that Net Zero Energy is set to become code minimum in California (called ZNE, or "Zero Net Energy" , in the Title 24 code) we're soon going to find out just how the economics of more PV vs. better building envelope is going to shake out with the tract home builders. I suspect most of us will be surprised just how PV-heavy it's going to turn out to be.

The US average cost of residential rooftop PV is currently a but under $3/watt (down from $4 just 2 years ago), but utility scale goods are being installed at a roughly buck-a-watt or a bit less, using much larger panels and ground mounted arrays. While rooftop solar will always be more expensive than utility scale, a tract home builder will have access to economies of scale and simplified system designs not available to the 1-off home PV retrofit installation that currently dominates the rooftop PV market. Given the still aggressive learning curve of solar I would expect it to come in under $1.25 /watt cost to tract home builders even in the near term ( in 2020 when ZNE becomes code min), under $1/watt before 2025. With solar that cheap it's going to be pretty hard to make the case for building envelope performance higher than IRC 2015 code minimum, but may simplify the roof line designs to provide enough roof real estate for cheap PV/ not super-insulated houses.

Our real prices on PV
The installation price of a PV system is around $1.50 per watt or higher and I doubt that it’ll become cheaper than that anytime soon, from any reputable and certified installer. Also it depends on the brand of the panels, warranties, equipment and mounting. Mounting depends if you are installing on the ground, a "flat" or a pitched roof. The pitched roof prices depend on the pitch, and the roofing material. It’s a lot cheaper to install panels in a standing seam roof than in a tile roof. So to blanket a PPW on solar systems is bit of fortune telling.
This is not any different than “brain dead” Builders and Realtors quoting price per square foot to build a house when they don’t know what the client wants, as far as specs. You could build the same house for $100/sf just as easy as $1,000/sf, depending on location, size, materials and finishes.
Our installed price for PV in NTX is around $4.00/wat, but it can add $.50/watt on certain pitched roofs. We use SunPower327 or SunPower335 because they have the best material and labor warranty in the business (25 yrs.), nobody else comes close, and I much rather work with an American company. Besides, you need to wait and see if imported PV system are going to get a huge tariff in a near future. Austin and San Antonio have a lot more competition of suppliers and installers, yet their price is only $.25/watt less per installed system.

PV tariffs aren't the issue for rooftop PV. @ Armando Cobo
None of the ITC's recommended tariffs would have much impact on residential rooftop installations, but would make a more serious dent in the economics of utility scale projects.

If it costs a buck-fifty installed cost for first rate goods now, it'll be a buck twenty five or less in two years at the current learning curve. That becomes a buck thirtyfive with tariff, unless the Trumpians double or triple down on ITC recomendations.

You can bet that tract home developers will try to cost-optimize the hell out of it, and they won't necessarily be in the "buy American" camp based on quality of the product OR the warranty. To get the average rooftop project down to the current $2.93/watt means somebody is installing them for substantially LESS than $4/watt.

The comparisons for rooftop solar between different versions aren't apples to apples, since the more recent reports it is broken out into residential and commercial & industrial, whereas in version 5.0 they were lumped together. But the utility scale numbers are fairly directly comparable in all three documents.

At the utility scale PV has dropped by more than 50% in levelized cost in the past six years, and by more than 30% in the past three. That is roughly in line with what I've seen quotes for rooftop PV experience in a similar time frame, but with a range. It's probably still possible to pay as much now as the average was six years ago in MA (~$6/watt, give or take a buck) , but most people don't.

For rooftop residential the range in the Lazard reports is wide. But at the high end it has gotten more expensive than three years ago, while remaining pretty much the same at the low end. This is at odds with recent experience in states with more mature residential solar markets, and may reflect newer markets developing in other states, or higher residential retail rates or increases in subsidy bringing more difficult/marginal roofs into financial rationality, or other local market factors. The goods themselves are not getting more expensive, and where small scale rooftop PV is a commodity and markets are competitive the prices can and do fall. With the larger nation wide solar companies half the installed cost is attributable to "customer acquisition", the marketing and sales end of the business. That too goes down when solar becomes a commodity, requiring less advertisement and hand-holding to close the deal.

When ZNE becomes the code minimum in California rooftop PV will be as commonplace as roofing & siding materials- a necessary aspect of any new house. In that type of market it's already a commodity, and competitive. When not building the PV systems piecemeal on site with $50+/hr rooftop labor, but assembling pre-racked sub-systems in a factory with <$20/hr labor, and the whole process of permitting & inspection is streamlined it will be possible to take a big hunk out of the current cost of rooftop residential solar.

In 20-30 years when it's time to replace the system the newer goods will be cheaper than they are today.

Whither PassiveHouse in all of this?

It's really hard to say, but until there's a way to mass-produce PassiveHouses in a factory at lower cost than site-building them, the already stiff economic headwinds are only bound to be getting stiffer. Heat pump & PV efficiency are incrementally improving, even as the installed costs continue to fall. At some point the sunk cost of that last 2" of EPS under the slab for meeting the modeled energy use numbers will have no rationale whatsoever (that point may already be behind us), both higher cost and higher carb on a lifecycle basis than the (mostly renewable) energy that will heat & cool the place over the life of the house.

Wasting green $
So by requiring a house to be net zero energy, California will cause people to spend in a very inefficient way (residential rooftop solar PV). They might beat the Lazard figures, but the difference from wind and utility scale solar PV $/Wh is huge.

Build a PassiveHaus and/or residential solar PV if you want, but for the same money, there are far better things that could be done for the environment.

Cost parity?
This is a claim I see often, but I don't understand it fully because it's mostly not explicitly said that "cost" is a lifetime cost, not upfront.
I assume, in all of these cases, this is in fact what people mean when they say "cost parity"?

Pole & wires matter @ Jon R
"So by requiring a house to be net zero energy, California will cause people to spend in a very inefficient way (residential rooftop solar PV). "

How do you know it's inefficient? It's not a simple problem.

Most analysts have concluded that the cost savings of the freed up grid capacity from distributed generation such as rooftop PV are significant, and even NECESSARY as personal transportation becomes electrified. To manage the additional peak & average load would otherwise require large investments in grid infrastructure, investments that can largely avoided (or at worst, deferred) given sufficient distributed PV. From a carbon reduction per dollar perspective the electrification of transportation matters. The value & cost of grid upgrades vs. PV to enable that will vary by location within the existing grid, but as a general rule, distributed PV is the second lowest hanging fruit of "non-wires alternatives" to grid capacity upgrades (second only to automated demand response.)

From the homeowner's direct finances perspective, given CA's current tiered rate structures and net metering options ZNE is very cost effective, but perhaps harder to sell to the math-challenged. Rate structures will change over the lifecycle of a house, but over the lifecycle of a PV system there is a strong tradition of grandfathering in existing systems (Nevada, notwithstanding.)

[edited to add]

In short:

The LCOE of utility scale PV is not the LCOE of the electricity fully delivered to the load, since grid costs are not assessed

The LCOE of rooftop PV is the fully delivered cost of that electricity to the load (or very nearly so), since the load is (in most cases) on the same transformer that's being fed by the roof top PV. Some of the load is even behind the meter.

[end edit]

davor: Yes, the PassiveHouse folks are usually talking about lifecycle cost (often including the unbilled costs of externalities of fossil fuels) whereas it's often misinterpreted as the up front cost. The error bars on lifecycle costs are pretty large, depending a lot on whether energy pricing is expected to be inflationary or deflationary over the next 5-10 decades. Most models assume long term price inflation or flat energy cost (I'm not sure where PassiveHouse is on this right now), but at the learning curves of efficiency & wind & solar & storage there is good reason to believe that energy will become cheaper over the lifecycle of a house. Over the past 50 years in the US electricity pricing has been below the underlying general inflation rate, and that was before significant amounts of electricity production was from zero marginal cost technologies with double-digit percentage learning curves. In the short term electricity prices are harder to predict, but over the longer term ever-cheaper renewables are putting downward pressure on pricing.

"Many Passive House projects today are approaching cost parity with conventional construction. When a significantly better product becomes available for little or no extra expense, then mass adoption becomes possible."

They are making the a case that builders should build this way because it doesn't cost them more to produce a Passive House than their existing product. It seems to me that the type of builders whose projects cost the same as a Passive House to build, are probably by definition those not able to build a Passive House efficiently either.

The author's argument differs from PassiveHouse dogma. @#9, #11
Malcolm is right, the author of this piece is talking about first-cost rather than lifecycle cost, which is where most PassiveHouse advocates make their case.

The Rocky Mountain Institute analysis in today's blog makes the case that Net Zero isn't a dramatic first price uptick from IRC code minimum but that has to be cheaper than PassiveHouse:

Cost?
I suppose that a Pretty Good House, perhaps not a certifiable Passivhaus or PassiveHouse, that only needs a single $3000 minisplit for heating and cooling could cost the same as a code minimum house with a $20,000 system.

California 2020 Requirements
Folks,
California is NOT going to full requirement for zero net energy in 2020 in new residential construction. Requirement will likely be zero net electricity in a dual fuel home. All-electric homes will be required to install a solar electric array equivalent to that required in a dual fuel home. California Energy Commission (CEC) has said the ZNE 2020 Residential/2030 Nonresidential & Highrise Residential goals were laid out in 2008 as aspirational goals to induce change. Back when the ZNE building goals were announced the state also set stringent targets for grid-supplied renewable energy through a renewable portfolio standard. That requirement has been raised in the intervening ten years and now stands at 33% renewable by 2020 and 50% renewable by 2030. Also, the definition of what is considered 'renewable' in California does not include large hydro. California is already at 30% renewable with a lot of utility-scale solar being added in the past few years. Without storage (which the CEC has utilities implementing at small scale as pilot test programs but which is still limited), with a renewables-rich grid, 'grid-harmonization' becomes a major issue. CEC is now saying the goal is carbon reduction, not necessarily ZNE for every new building. To see what the CEC is now planning to implement through the 2019 Title 24 Part 6 Energy Standards for Residential Buildings (which includes multi-unit residential bldgs of 3 stories or less), which will take effect on January 1, 2020, see these recent presentations by CEC staff. It is likely different from what you imagine.http://docketpublic.energy.ca.gov/PublicDocuments/17-BSTD-01/TN217286_20170424T162107_4202017_Staff_Workshop_Zero_Net_Energy_Strategy_Presentation.pdfhttp://docketpublic.energy.ca.gov/PublicDocuments/17-BSTD-01/TN220969_20170830T155312_2019_Standards_ZNE_Strategy_Presentation.pdf

Thanks for that, Bill!
They've clearly had to make adjustments, given that PV costs have fallen faster than anybody's projections, eh?

Regulations are playing "catch up " with reality, for both the utilties, and Title 24's ZNE provisions.

A couple of wild cards in the whole duck-curve panic in the presentation, are how rapidly and deeply aggregated demand response markets gets implemented, and how many EVs plugged into smart car chargers become available to participate in those markets. Hawaiian style self-consumption provisions are expected to be cost effective in CA by 2020, but the bulk of the duck curve problem is more likely to be flattened by automated aggregated demand response by 2025 than any changes to the ZNE in Title 24.

The value of the PV 's ENERGY in mid day will continue to be low, but the value of reduced load on the grid (even if you have to curtail the excess on some days) of the distributed PV is still high for the ratepayers, but has negative value to the investor owned utilities who get compensated with guaranteed returns for approved infrastructure upgrades. (It's called "competition", folks!) There are lot of stakeholders with a spoon in the Title 24 ZNE soup trying to stir it their preferred way.

I suspect the regulations will continue to be out of phase with reality for some time, given that nobody's crystal ball is that good. But having more demand response NOW (be it with Wi-Fi thermostats or electric water heater controls) could already do a lot before the electric vehicle tsunami washes ashore.

Getting California's wholesale electricity markets better integrated into the WECC could also do a lot for California's duck curve in then near term, taking zero marginal cost low local-value PV on overproduction days and exporting it.

Quack, quack, goes the duck!
The big challenge with renewable energy isn't cost, but intermittency. As is already evident in locations with even relatively low solar penetration (Hawaii, California, Germany), oversupply during sunny afternoons is driving wholesale electricity costs negative. This doesn't bode well for the future of "net zero," which assumes that any power generated has a use, and a value. As we shift from dispatchable-at-will fossil fuels to intermittent renewables, storage and load reduction will be critical and valuable. In the case of winter (heating), they will also be expensive. Batteries can store for a day or two, but months of storage is a different game - pumped hydro, power-to-gas, etc. Tricky and expensive compared with envelope improvements over code. Passive House is a big part of the answer, and a prudent financial move in an all-renewable grid. Truly "renewable ready" buildings have daily and seasonal demand/load curves that recognize that solar doesn't work when it's dark!

The peak grid load in most of
The peak grid load in most of California is in the evenings. Obviously residential solar PV does not reduce the load on the grid at this time. The grid still has to be built for this peak load so no avoided grid cost.

Lazard's cost difference between residential and utility solar is so large (like $.15/kWh) that it's a very rare case that avoided grid costs can make up the difference. If there's data showing typical avoided grid costs in excess of this, let's see it.

It's not intermittent- it's variable, but predictable. @ Graham
The aggregate output of renewables over any reasonable geographic area is as predictable as the weather, and more predictable than the average load.

Terms like "intermittent" apply more credibly to centrally sourced power grids where large amounts of power can be interrupted in a few milliseconds by a storm or a power plant fault, or a gas pipeline supply fault. During the Polar Vortex of 2014 the lights were kept on by midwestern wind, PV and the long haul transmission infrastructure and demand response (mostly within the PJM region), as many large coal plants failed to perform due to frozen fuel piles and frozen fuel handling equipment, and many gas power plants in the northeast could not source sufficient gas supplies.

The dispatchability of coal or nukes is too slow ramping to be economic for load following, even without renewables in the grid mix, and even worse for voltage & frequency control. Dispatchable load aka "demand response" is cheap and effective, and fast enough to provide ancillary services. Wind power has become the go-to frequency & voltage control solution cutting into the capacity factors of peaking gas plants in the midwest, but batteries & demand response are more favorable solutions elsewhere. A lot of load following and peak reduction can be delivered with demand response, even now, and most demand response markets are still in their infancy (or pre-natal), having been delayed by nearly a couple of years before the US supreme court blessed FERC Order 745. (The ISO-New England demand response market won't become active until next June!)

Within the PJM grid region it takes more storage to manage an 80% renewables grid (due to the less flexible baseload fossil burners) than it takes to manage a 100% grid, with minimal overbuild and curtailment. California is a special case since they have self imposed limitations on participation in the WECC grid region markets, and wind in CA falls off in winter when PV output is lower, unlike most of the US. The large wind farms in Wyoming and the dedicated transmission lines to the California border will fix some of CA's seasonal issues, but it could be solve more flexibly legislatively, by jumping more fully into the WECC interconnection.

The PassiveHouse modeling for seasonal storage seems to pretend that there is no long haul grid infrastructure, and presumes that all energy must be sources locally (even when it isn't right now!) A Seattle City Light customer is already essentially 100 % renewable, with seasonal storage no, less, supplied by hydroelectric plants some more than 200 miles away fed by mountain snowpacks, and large amounts of water behind the dams. But that's not the way PassiveHouse models it.

Rather than being "...a big part of the answer..." PassiveHouse is a ridiculously SMALL part of the answer, since like most Net Zero houses, heating hot water dominates the energy use, not heating & cooling, and the residential housing sector is but a fraction of the overall grid load and overall energy use picture. Like Net Zero houses, putting demand response controls on the water heater in a PassiveHouse is the most useful thing they can do for the duck curve problem, and will only barely move the needle on seasonal energy use swings. The incoming water temperature can have as big an a seasonal energy use change as the heating & energy use in a Net Zero house in most California locations, and a PassiveHouse is subject ot the same water temperature issues. Optimizing the wind + solar renewables mix and transmission grid throughput fixes most of the seasonal energy issues, far more cheaply than building a million PassiveHouses or long term storage schemes.

utility scale solar stills wins
Looks like they claim a $.03 to $.05/kWh reduction in avoided distribution and transmission costs for behind the meter solar - not even close to Lazard's $.15/kWh premium for residential solar. Not accounted for is that utility scale solar also creates reductions in transmission costs (further widening the gap).

Three builders walk into a bar...
One builds regular 'code-compliant' homes the other builds (slightly) better homes using 'rule of thumb' upgrades, two mini-splits and a small PV array to the roof and calls it good. The third builder uses software to determine how to optimize her buildings for maximum cost-benefit. She can tell you whether the windows you like will save you money, or if a slightly higher performance option is worth it. She has a record of the incremental cost increase of all the upgrades she offers over code compliance for all her projects - and can show you that info. She can also confidently size the PV, based on her energy model for your project, combined with records from previous projects in your region - and can perhaps even increase the array to cover your electric vehicle. She has an app on her phone that tracks the live energy consumption isolated for all appliances and equipment, plus local indoor & outdoor temperature and solar production for the past three three buildings she's built. She can share all that with you right there in the bar.

Which of these three builders would you hire?

Zack has essentially written about this third builder. She uses a tech-based approach to deliver buildings - something not typically offered in this country either systematically or at scale.

If we are to follow Dana's line of argument, we may as well carry on building the same old 'code-compliant' buildings that have been delivering poor and inconsistent results since the stone ages because the plummeting cost of distributed PV will save us... Huh?! I've yet to meet one client who's asked me about the cost of PV until the house is built. If they can actually afford to build, what they care about is whether the building will be comfortable, low maintenance, not cause mold and be inexpensive to operate - usually in that order. (And none of them care what I call it - as long as it delivers.)

Bottom line is if you can't find (and use) a reliable system that enables you to consistently deliver these results, your days in the 'Green Building' industry are likely numbered. After all, we are still talking about 'Green Buildings' over here - or has this forum been renamed 'Green Solar Advisor' while I was not looking?

Custom homes are a different market, and a much smaller market than what codes are targeting.

"If we are to follow Dana's line of argument, we may as well carry on building the same old 'code-compliant' buildings that have been delivering poor and inconsistent results since the stone ages because the plummeting cost of distributed PV will save us... Huh?!"

Not "...the same old 'code-compliant' buildings...", the new improved code compliant buildings. Codes have improved considerably over the past 25 years, but compliance/enforcement hasn't kept pace. If PassiveHouse home design became code min, would the enforcement and compliance magically keep (or catch) up?

Pretending that PassiveHouse fixes any aspect of the duck curve or seasonal energy use significantly more than a Title 24 ZNE (especially ZNE with self consumption priority) is disingenuous. PassiveHouse does marginally better on total energy use and marginally better seasonal energy use, but not a whole lot for the time of day that energy is used (the duck curve problem), or even much for the peak load (which is dominated by hot water heating + evening cooking/lighting/entertainment which is roughly the same in a PassiveHouse and a typical Net Zero house.)

A house is a house, and NOT a grid management tool, unless you MAKE it one with automated demand response, and even with DR a house isn't going to be a major part of the solution to the grid management problem. Electrified transportation might be a decent slice o' the pie though:

First cost/lifecycle cost
Ah yes, I figured that the statement "Passive House’s clean energy solution doesn’t have to cost more" would stir things up with you all. No better way to rile up GBAers than to make cost claims about Passivhaus. ;-)

Response:

1. Multifamily PH is approaching zero cost premium on first cost, right now. We see this with our own projects at NK Architects. Pennsylvania Housing Finance Agency data, comparing the PH projects they fund with the conventional projects, bears it out: less than 2% upfront cost premium. Google "Pennsylvania spurs on affordable Passivhaus development" to see the post I wrote yesterday showing that data.

2. Single Family PH does have a first cost premium (though it's declining), but when you balance the monthly expense of financing that first cost with the monthly savings on utility bills, Passivhaus makes economic sense for the building owner now. My experience at Hammer & Hand included the Pumpkin Ridge Passive House that bore this out. And that was in early days of PH in the US when our learning curve was still steep. Our colleagues at Artisans Group accomplish this economic sweet spot for SFH clients all day long, every day of the week. So do lots of other practitioners. (Hell, Adam Cohen delivered his SFH PHs at ZERO up-front cost. I don't know how, but he did it routinely.)

3. But what about the split incentive, you say? It is true that production builders are the ones that will be making the upfront investment in first cost. And they don't reap the ongoing rewards of utility bill savings after they sell their product. It's probably unfair, given lack of market awareness, to expect that builders will be able to sell PH homes for significantly more than other product. At least not yet. So we need policy/financial innovation if we want broad market uptake. PACE financing is one such model. There are others. This isn't rocket science...it does take policy moves. Negawatts have real value, and there are ways of rewarding the investor with that value.

Meanwhile, momentum for meaningful climate policy at the state and local level is building. In my neck of the woods, Oregon Gov. Kate Brown just adopted broad green building mandates that will compel builders to move toward very low energy use buildings, like Passivhaus. Washington Gov. Jay Inslee is eager to pass aggressive climate legislation now that both houses of the state legislature are blue. Big policy moves are on their way, and all the innovation that PH designers and builders have been doing out on the bleeding edge of the market will help shine a path to "building as climate action." In many parts of the country, production builders won't have a choice but to build Passivhaus-like homes.

And let's remember that efficiency is the "first fuel" and that all credible pathways to slowing climate change depend on significant improvements in building energy efficiency. The reason is simple math. The Kaya Identity tells us that GHG Emissions = Population X GDP X Energy Intensity of Economy X Carbon Intensity of Energy. Population and GDP will rise in coming decades, so to bend GHG Emissions toward zero we will need as much energy efficiency and renewable energy as we can get our hands on. It's not an either/or proposition. We need Passive Houses everywhere, and solar panels on all of them. (And yes, we need wind and solar at the utility scale even more.) Innovation, the market, and ultimately regulation will get us there with our buildings. I hope. But "Pretty Good" isn't good enough anymore, IMO.

We need retrofit efficiency more. @ Zach
"We need Passive Houses everywhere, and solar panels on all of them. (And yes, we need wind and solar at the utility scale even more.) Innovation, the market, and ultimately regulation will get us there with our buildings."

The turnover of housing stock is glacially slow. We can quibble about the degree of impact on ZNE vs. PassiveHouse forever, but the elephant in the room is the already existing buildings.

The vast majority of the houses that will be standing in 2050 have already been built, and a truly code compliant IRC 2015 code min house will outshine the existing average by a LOT (not that I'm advocating stopping there) and a Title 24 ZNE house would outshine it even more.

To make a meaningful impact of the carbon emissions of housing starts with fixing the existing houses ("...efficiency is the "first fuel"..." , indeed!), and better carbon-accounting methods than those PassiveHouse uses. eg:

Building a PassiveHouse within the Seattle City Light service area has effectively no impact on carbon emissions from the energy use relative to a leaky barely insulated circa 1963 trailer heated with an electric hot air furnace, with an electric water heater. If the PassiveHouse's hot water was heated with gas, it's emissions would be higher than the trailer. (See: http://www.seattle.gov/light/FuelMix/ ) That's reality, but a reality not reflected in PassiveHouse accounting methods. If there's a rationale for building to PassiveHouse standards in that utility district, it has to be something other than carbon. Building to Net Zero in that location offsets energy use growth that might encourage more power imports from less-green sources, and frees up grid capacity.

The split incentives on production houses isn't an easy one to solve, and I hope someone comes up with a solution that works for all stakeholders, including lenders. The PACE approach is often at odds with mortgage lenders. Whether Net Zero is better or worse than PassiveHouse on a cash flow basis depends a lot on rates and rate structures, now, and over the lifecycle of the house, and whether utility costs will be rising or falling over time. The financial models get pretty squishy, with big error bars, but can we agree that solar sales-droids modeling a 6%/annum electricity price inflation in their sales pitch should be prosecuted for criminal fraud? :-) The crashing LCOE of renewables is putting downward pressure on electricity pricing, and even before the wind & PV tsunami began to rise electricity pricing has been mildly deflationary over the past 4-5 decades compared against the base inflation rate.( https://www.eia.gov/todayinenergy/detail.php?id=20372 ) In most high renewables states that deflationary trend has been accelerating, which of course changes the financial models for high performance houses.

There's plenty of room to disagree with the "..."Pretty Good" isn't good enough anymore..." opinion. A PGH house is "...good enough..." to make Net Zero pretty easy, and in a production home volumes, pretty cheap. Rooftop PV in the US is nearly twice the cost in Germany, and it's not because they have easier roofs to work with or cheaper labor, or are using crummier components. It probably has something to do with it being a dramatically more competitive market, with streamlined permitting & inspection, and far lower marketing & sales costs.

In Pittsburgh we are currently retrofitting an abandoned 1897 elementary school and its 1929 addition to Passivhaus, and adding a new Passivhaus wing, delivering it as affordable housing for seniors, and doing so at nominal (perhaps no) cost premium. The construction budget is $167/sf, $1/sf LESS than the average PHFA-funded affordable housing project in Pennsylvania ($168/sf). It's called Morningside Crossing.

Especially when we're talking multifamily buildings, the meme that Passivhaus is expensive is outdated, even for retrofits.

BTW, as you know. we export hydro power from the PNW to Southern Cal with HVDC lines. Our electrons within SCL service area commingle with dirty electrons from elsewhere in the grid. And if you go across Lake Washington to Bellevue you're in Puget Sound Energy territory, which still has 2/3rds fossil fuel in its mix. When we save energy in the PNW we offset dirty energy.

I'm fully onboard with you about the power of the clean energy transition and importance of renewables. It's really exciting. But that doesn't change the fact that we can get pretty revolutionary with our buildings at low cost, too. That seems particularly relevant here, given that this is a green building forum.

(P.S. Buildings should be moving to all-electric. I agree with the critique of the traditional PH bias toward gas.)

Keeping up with the changes....
Zack and Dana - PHI dropped the 'bias towards gas' in 2015 when they implemented the PER structure. It pretty cleverly negates the easy credits for gas appliances and puts all-electric buildings in the driver seat. It also removed the 'one size fits all' primary energy factor and parsed it into specific energy use to more accurately identify peak and seasonal use. Energy use is now PER 'factored' separately into general electricity, hot water, heating, cooling and dehumidification categories. I've presented on the details most specifically for California here: https://www.slideshare.net/Bronwynb/buildings-for-an-all-renewable-energy-future-for-utilities. (Shift happens - keep up with the changes!)

Dana - we certainly agree that in California, our codes are already pretty good and not too far off from Passivhaus in many of our 16 climate zones. In others, we're a good measure off. You identify that once we reach our magical 'ZNE' target, our next challenge will be enforcement and finding out if our code compliance building actually perform... A few progressive cities have already identified significant 'performance gaps' between predicted and actual performance and have found that Passivhaus buildings serve as a more reliable solution. Our policy track at NAPHN17 focused on this challenge and I look forward to seeing what the outcomes is from representatives from the various cities and states who attended.

In the meanwhile, a presentation by Integral Group shared at NAPHN17 looked at the specific ramp rate reduction that Passivhaus buildings offer to soften the Duck Curve issue on our California grid. It includes a comparison of PV required for code compliant vs Passivhaus buildings in a number of our local climate regions: http://naphnetwork.org/wp-content/uploads/2015/04/S-1-A_Stefan-Gracik-and-Stet-Sanborn.pdf. It then goes on to review this in a neighborhood context and adds in a 2020 ZNE comparison, which appears to not make much difference...

As Bill Burke mentioned earlier in this thread, the California Energy Commission has been reframing their language around ZNE to focus more specifically on carbon emissions reductions, rather than simpler 'net zero energy' targets. I wrote about the nuances of that difference in my guest blog here on GBA. This one: https://www.greenbuildingadvisor.com/blogs/dept/guest-blogs/batteries-included.

Climate change
NASA says all 130 glacier have been growing over the last 10 years.
And solar flare are decreasing over the next 20 year & we will be moving into a mini Ice Age like the 1800's.
So cold may be a bigger problem than heat & ice or snow on solar panels in winter, may be a problem.
But green homes will still work in the cold winters.

energy use, climate change
The residential sector is responsible for about 20% of US GHGe. About 68% of residential CO2e comes from electricity use, the rest is combustion. Of this, only about 13% - 20% is water heating. To me, all electric point of use systems water heaters could be the way to go if coupled with solar and micro-wind. About 37-49% is heating/cooling, the largest end use of energy by quite a bit. This speaks volumes to the importance of having really good insulation. The remainder is appliances and home electronics. Transportation (which includes LDV, shipping, and aviation) is about 35% of emissions, and of this 35%, about 42% is from LDV (cars trucks etc). The duck curve is behavior based, I am not sure why shifting energy supply or building design would change what is basically a behavior curve. But, V2G tech could help offset the peak hours issue, and integrate residential and transportation energy into low carbon emissions while improving grid reliability and resiliency. Personally, while US averages, I found these numbers useful to figure out how important residential energy/emissions are, major energy end uses (and subsequent solns), and how important integrating buildings with our transportation can be. The marginal cost effectiveness of passivhaus/passive house will vary based on climate, specific energy use for a buyer, and the skill of the builder. Comment 23 suggests that may not be much of a premium relative to a code house, others disagree. To me, averting climate change as much as possible is important enough that if there reaches a point where the cost of additional emission reductions might mean investing in a building that costs a little more, then it is worth it. I recognize for Passive House to become more widespread in the US, that the cost will have to be eqvlnt or cheaper to a codes house, so it may be a personal choice. Often the marginal cost of emission reductions increases as emissions are reduced, so getting that last extra bit will have a premium price. To some that is worth to others not. Things shouldn't always be framed in terms of economic costs/benefits when thinking about green building or the moral imperative of climate change.

Joel, NASA does not say all 130 glaciers have been growing, all the evidence is to the contrary--they're shrinking. Decreases in solar flares likely did not cause the mini-ice age. The mini-ice age was caused by volcanoes, the gases and particles ejected by volcanoes led to cooling which expanded the ice cap and weakened the Atlantic currents like the Gulf stream/thermohaline circulation that pump warm air into northern Europe. Because 99% of scientists agree that climate change is real, the Earth is heating, and humans are responsible, every nation except the US is working together to reduce emissions. Unfortunately the US has a large proportion of the public and politicians that ascribe to alternative facts because these 'facts' reaffirm already held opinions; as opposed to objective, scientifically based empirical facts. Hopefully, individuals, cities, states, and regions can band together to overcome this issue and lack of leadership. Integrating our homes with how we get around (transportation) is a powerful solution at the individual level.

I'm a small building energy modeler, and the tools of my trade are airtightness, insulation, window placement, and heat-recovery ventilation. These are also the tools of the international Passive House…